Subjects: Common Agricultural Policy; European farm subsidies
E&OE...........
PRODI:
Australian Prime Minister. I think after ten years that Mr Prime Minister was not the European institutions . and we had a very deep and friendly exchange of views on both the evolution of Australian and European politics and economy and I am very happy to hear the news about the Australian economy and how deep are now the links between European Union and Australia, in terms of investments, in terms of trade. Not only in [inaudible], but in the level of growth. And we hope that this can be developed even more intensively in the future.
We discussed the political main issues in terms of multilateral co-operation and link to the development of world politics. We discussed about the major [inaudible] programmes like the Kyoto Protocol, the International Court and it was really an exhaustive open meeting and exhaustive open discussion.
Of course we dedicated the last part, maybe the longest part of all maybe, to the agricultural policy and I explained how the proposal decided today by the Commission will substantially help [inaudible] trade in agricultural products. And I am happy that tomorrow the Prime Minister will meet Commissioner Fischler in order to get deeply into the details of this delicate and important chapters. Thank you.
PRIME MINISTER
Well thank you very much Mr President. My thanks to you and your colleagues for the opportunity of talking in such a direct manner. I made it very clear to the President and his fellow Commissioners that Australia sees the relationship with European Union as a very broadly based one. We have of course a very strong interest in agricultural policy, to which I'll come in a moment. But we shouldn't lose sight of the fact that the European Union is a huge investor in Australia, that something in the order of 24% of Australian imports come from the European Union and about 12% of our exports go to the European Union, collectively making the Union in all of those manifestations our largest trading partner in the broadest sense of that term. It was an opportunity for us to analyse some of the political influences and the different views on multilateralism and unilateralism and we do have some differences in mechanism rather than ultimate goals in relation to the Kyoto Protocol. Australia remains committed to reducing greenhouse gas emissions. We currently don't see it as in our national interests because of the absence of the developing countries and the United States to ratify the Protocol.
Can I say that the news from the Commission today regarding the new approach to the common agricultural policy ultimately is a matter of course for the member countries of the Union to respond to. From Australia's point of view, anything that will over time address our twin concerns, and that is export subsidies and market access, anything that over time will address those issues will be welcomed by Australia. It obviously remains the greatest point of contention and it remains a deeply held grievance on the part of Australian primary producers that barriers to access and heavy export subsidies exercised and employed not only by the European Union but also by the United States, does damage our farmers very unfairly in third world markets. I do hope that out of this package of reforms there is a change that can provide Australian farmers with more opportunities.
But I want to say Mr President that this has been an opportunity to confirm the strength of the historical, cultural and political links between Australia and the member countries of the Union, and also between Australia and the European Commission itself. On this visit of mine which has brought me to four member countries of the European Union, I've had an opportunity to strengthen those links bilaterally and also multilaterally through this visit to you and your colleagues here. I've extended an invitation to the President to visit Australia. I hope he can take it up sometime in the not so distant future, and it will then be an opportunity for him to be further exposed to the vivacity and dynamism of the modern Australian community and the modern Australian economy.
JOURNALIST:
Mr Howard, do you believe that statements made by Mr Fischler today go far enough in looking after the interests of Australian farmers?
PRIME MINISTER:
Well Mr Fischler's proposals are addressed to a European Union audience and I speak of the ultimate impact of policies on Australia. Look it's too early for me to make any judgement except to say this, that what he has unveiled is new policy and new approach and if it results in a reduction in surpluses and as a result we face less or fewer subsidised exports from the European Union into third markets, that will help Australia. Now all of those things are conditional responses. I can't take it any further than that because I don't know how it will work its way out. This is a situation where there will be a domestic European reaction to what he has proposed and that is a matter for the Commission and the member countries. I can only speak properly of the impact things have on Australia and if they are the results, then that will be good for Australia, but if they are not the results, then nothing will have changed.
JOURNALIST:
Mr President, if I could direct a question to you from the Australian media sir. What do you say to Australian farmers who are hurt by any new subsidies, given that they are some of the most efficient producers in the world.
PRODI:
What we say. I say simply that we first talked a few years ago and today we're making great progress in the CAP of agriculture from price support from subsidies. We simply are following the market ups and downs, the market behaviour, and the difficulty between European prices. [inaudible] prices are decreasing and in the future will decrease more, more, more and more. Of course I also will ask them to be a little more open to foreign trade in agriculture, you know, as a current thing means ...40 000 you know, and this is what I tell frankly to the Australian farmers.
JOURNALIST:
Mr Howard, there are still subsidies of nearly $600,000 AUD to farmers. What's your response to that?
PRIME MINISTER:
Mine? Well, look, we are unhappy with the present arrangements and unless and until they change we will remain unhappy. I am dealing in a very factual and candid fashion. What is positive about the announcement that has come out of the Commission today is that for the first time it decouples the subsidy from production and that has potential for surpluses to diminish over time and therefore the opportunity for exporting with subsidy those surpluses into third countries to diminish. Now, as I said earlier in answer to Nigel, if all of those things happen, then at the end of that process Australia could benefit. Now that's a truthful factual response.'
JOURNALIST:
You mentioned the United States as well. farm bill in effect going in the opposite direction. do you feel this proposal by the commission basically makes the EU very much the lesser of the two, how should I say, . Australian agriculture than the United States?
PRIME MINISTER:
Well, I'm not going to get into sort of gradations of blame-worthiness. All I can say is that on the last figures I saw, the European Union currently supports to the extent of 35% of the value of its agricultural production, the United States 21% and Australia 4%. So if you are an Australian farmer that gets only 4% of the value of your production from your government and you see an American getting 21% and a European getting 35% and I don't know what the figures are for Japanese farmers, I think they get very very heavy support as well, perhaps more so than some of the others. We are, by any measure, very efficient agricultural producers and we will, Australian farmers will properly - and the Australian Government in their name and on their behalf - will continue to remain unhappy and aggrieved until progress is made to giving us a better go in third world markets and greater access. I do welcome the fact of this proposal today because it does represent a decoupling and if it has the ultimate consequences that I said would be needed for Australia's benefit than that will be a very good thing for Australia but we have to wait for.
PRODI:
I have to add something. Yes, they are doing the opposite direction and we could do it, and I did it also after the American decision. And it was not easy, but we insisted because we trust, we believe in free markets, and Europe is one of the biggest importer of agricultural goods, we import enormously now and our imports are increasing and last point remember that they are, as I reminded before, not only tariff barriers but also non-tariff barriers exist in agriculture.